Can a team circumvent the salary cap by paying a player less but arranging for an affiliated company to also pay him, perhaps by way of an endorsement contract?
I suppose it could happen, but the NBA will investigate if it suspects that an outside person or organization is paying a player on behalf or at the request of a team. If they find out that such an event has occurred, they will penalize the team. For the first offense by a team, the fine can be up to $2,500,000, forfeiture of a first round draft pick, and/or voiding the player’s contract. The penalties increase for subsequent violations. Incidentally, players are no longer allowed to become player-coaches. This is because it would be possible to circumvent the cap by signing a player as a player-coach, and paying him less as a player but overpaying him as a coach.
Related Questions
- Can a team circumvent the salary cap by paying a player less but arranging for an affiliated company to also pay him, perhaps by way of an endorsement contract?
- If we end up paying a full year’s salary through a company sick pay scheme, surely we don’t have to pay holidays as well?
- How does a base year players salary count against the teams salary cap?
